Section 69A cash addition fails where accumulated taxed income plausibly explains opening cash balance without contrary evidence.

An addition under section 69A for opening cash-in-hand was deleted because the assessee gave a plausible explanation that the cash represented withdrawals accumulated from income already offered to tax. The earlier omission of the cash balance in a return did not, by itself, make the later opening balance unexplained. Substantial earlier returned income supported the assessee's financial capacity, while the Revenue relied mainly on presumptions such as the absence of contemporaneous cash expenses, low demonetisation deposits, and non-production of a cash book at assessment. On the record, the assessee discharged the onus and the addition was not sustainable.

---

---

Issues: Whether the addition made under section 69A on account of opening cash-in-hand as unexplained money was justified.

Analysis: The assessee consistently explained that the cash balance represented accumulation of withdrawals from bank accounts out of income already offered to tax, and the absence of cash balance in the earlier return did not by itself establish that the later opening cash balance was unexplained. The assessee's returned incomes in earlier years were substantial and remained undisputed, supporting the financial capacity to accumulate cash. The adverse conclusions drawn by the lower authorities were based mainly on presumptions, including absence of contemporaneous cash expenses, low demonetisation deposits, and non-production of a cash book at assessment stage. The procedural objection under Rule 46A did not alter the core merits, and the surrounding circumstances did not justify rejection of the assessee's explanation.

Conclusion: The assessee discharged the onus under section 69A, and the addition of Rs. 10,98,810/- as unexplained cash was not sustainable and was directed to be deleted.

Ratio Decidendi: An addition under section 69A cannot be sustained merely because an earlier return did not reflect the cash balance, where the assessee offers a plausible source from past taxed income and the Revenue brings no contrary material to disprove the explanation.

---